Picasso (1907) Source: Wikipedia

Richard Ogle described how Picasso came to paint ‘the first real masterpiece of the 20th Centrury’, the Les Demoiselles d’Avignon. In his book ‘Smart World‘ Ogle argues that there is no such thing than the lonesome Genius who came up with the idea overnight.

Regardless of profession or calling, Ogle argues, that humankind has a collective consciousness in which trailblazers like Picasso delve to retrieve their ground breaking ideas. Picasso is quoted in referring to African art for the inspiration of this painting.

By thinking outside the brain and tapping into the extended History and wealth of experience of the extended Mind (Ogle 2007, 10) we see how all great inventions actually came to be. Think of the internet itself- Wikipedia is just one example of such an extended external brain in action.

It is interesting to look at intangible assets in firms that way. Perhaps intangible assets (Intellectual Property, Trademarks and Patents) and their nature of ’suddenly leaping onto stage’, thus ‘disrupting the status quo’ are just an expression of where we are going as a human society. Look closely and we can see how the collective conscious is opening up individual creativity, for example with the ‘Open Source’ concept.

Not one company can claim to ‘own the ideas’ since everything is connected through history, material, memory. This is a scary thought for economists and accountants alike. Yet, this disruptive idea space (Ogle) was first named by Schumpeter as prerequisite to entrepreneurship.

The intangible is quickly becoming a new stage of consciousness, a way forward to the next new thing. It is true that our current Western business models  can’t put a price tag on it- which I assume means ‘making the intangible tangible’ in current economic thinking. If the summary of collective social networks are actually creating the new value in our economies than it is time to investigate the consistency of this mix instead of denying its contribution to firm assets as not quantifiable.

Intangible assets remain definition bound and thus subjective. In brand and design practice, most professionals don’t acknowledge that what they are delivering as business service is considered a difficult return on investment for their clients.

There is a lack of consistent terminology in the literature relating to intangible assets and intellectual capital.Management scholars tend to employ either “capital” or “asset” terminology to refer to investments with no physical existence.

Lawyers refer to intellectual property, which has property rights in law. Accountants do not generally use the term “intellectual capital”.

Accountants refer to identifiable intangible assets, goodwill and intellectual property (with legal rights) under the umbrella of “intangible assets”.

Economists refer to intangible assets in terms of their source, as investments, and role in production, as capital. (Hunter, Webster, Wyatt, 2005)

As business-to-business services that deliver design, brand and marketing related services, practitioners should take note of the difficulty that clients have with working out expenditure justification. I think it is therefore important to assist the client in going through a transparent process of achieving mutual goals such as I described in my earlier post about the Consensio intangible asset chain.

Business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets.

(Btw: For a quick definition on institutional, professional, practice and practitioner goodwill, see for example here or Wikipedia.)

IA’s are according to this:

• Intangible assets can be identified and described. They must be a specific property, not an idea.
• Intangible assets are legal property. Just as tangible assets, the owners can assert their legal rights to and defend their possession of intangible assets.
• Ownership of intangible assets can be transferred. For example, the owners can sell them or give them away.
• Evidence of intangible existence. Documentation is a typical way to establish that. Examples are customer lists, blueprints, contract documents, software source code printouts.
• Intangible assets have a life span.

Why is it locked out of the definition of an intangible asset when all you have to do is follow through with this logic and place ‘idea’ in the above bullet points? So tell me, what did my last idea not do to increase business value?

I carried it around, I gave it to somebody, I wrote it down, it got me a good reputation, I was paid for it and in the end it might be a good one to keep for solving a specific problem in the organisation later on. A bit of goodwill, anyone?